Influence of Corporate Entrepreneurship Dimensions on Performance of Commercial Banks in Nairobi County, Kenya

Abstract

The continued performance of commercial banks has been a subject of concern in Kenya, where despite this being a crucial sector in the country’s economy, its overall performance and growth has only been limited to less than 20 percent of the banks. While empirical evidence has portrayed the essence of corporate entrepreneurship in stimulating organizational performance, this has less backing in Kenya’s context, particularly among the commercial banks. It is on this background that the study sought to examine the influence of corporate entrepreneurship on performance of commercial banks in Nairobi County, Kenya. Specifically, the study sought to assess the effect of proactive dimension on performance of banks, to determine the effect of risk-taking dimensions on performance of banks, to establish the effect of innovation dimension on performance of banks, and establish the effect of corporate venturing dimensions on performance of commercial banks in Nairobi County, Kenya. The study was anchored on knowledge spillover theory, endogenous growth theory, Schumpeterian theory of innovations, discovery theory on entrepreneurship and creativity theory of entrepreneurship. The study adopted descriptive research design, and targeted 1,413 managers of commercial banks in Nairobi County. Stratified random sampling method was used to determine the sample size of all 444 commercial bank managers. The study collected data by use of questionnaire as the main research instrument. The pilot study was conducted in commercial banks in Kiambu County. Validity was measured by use of the university supervisors. Reliability of research instruments was tested by Cronbach alpha coefficients of 0.7 if reliable and less than 0.7 not reliable. The collected data was analyzed by descriptive statistics which included percentage, mean and standard deviation. Inferential statistics including correlation analysis and multiple regression models were used to establish the relationship between independent variables and dependent variable. From the analysis of the findings, it was established that proactive dimension, innovation dimension, corporate venturing, and risk taking dimension significantly influenced the performance of commercial banks. The study concluded that while the key corporate entrepreneurship dimensions were found to significantly influence performance of commercial banks, most of the surveyed banks had not adequately implemented the dimensions, and this was strongly responsible for the declining performance. The study therefore, recommended that for commercial banks to optimize their performance, they ought to integrate key corporate entrepreneurship dimensions including risk-taking, proactiveness, innovation, and corporate venturing to stimulate their business resilience and continued expansion for sustainable performance